Creative Technologies has entered into a purchase and sale agreement with an unrelated buyer for the proposed sale of its property at 1901 McCarthy Boulevard in Milpitas, California, for a consideration of US$11.13 million ($15.0 million).
The agreement was signed by Creative’s wholly-owned subsidiary, C L Realty.
Under the agreement, the buyer will pay a deposit of US$1 million into an escrow account, which is refundable if the results of the review on the property is unsatisfactory.
The balance of the purchase consideration, along with the deposit, will be paid to the group upon completion of the transaction.
The transaction is expected to be completed in the 1HFY2022 ended June.
It is said to be in the group’s best interests, as it allows the group to unlock the value of the asset.
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The proposed transaction will realise net cash proceeds of US$9.7 million, which will be used as general working capital.
It is expected to contribute US$9.1 million to the group’s net profit after accounting for the net book value of $0.6 million and estimated expenses and taxes.
Shares in Creative Technology closed 4 cents lower or 1.6% down at $2.50 on July 8.
